On October 17, 2015, NUO Hotel, Sequoia Capital China** 10th Anniversary and Entrepreneur Ceremony Roundtable Dialogue.
The founder, Shen Nanpeng, threw a soul question to the bigwigs present: There are giants in every industry, how did you succeed? Or rather, how did you come back to life?
Liu Qiangdong and Zhang Yiming talked eloquently about the pain points of the e-commerce industry and the differentiation of Toutiao's technical route.
Shen Ya, the founder of Vipshop, has some Buddhist affiliation: "The Chinese market is big enough, and we can still divide one acre and three points of land." ”
Make money with a muffled voice
I firmly believe that Ali will change, and Ali will change. All great companies are born in the winter. ”
On November 29, Ma Yun spoke on Alibaba's intranet, and was interpreted by some ** as "Mr. Ma can't sit still".
On the same day, Pinduoduo's market value surpassed that of Alibaba, which was regarded as an incredible historical moment in China's e-commerce industry.
Also feeling the crisis is JD.com.
On December 9, Liu Qiangdong also spoke on the intranet: "I won't lie flat no matter what, and I hope my brothers will never lie flat." ”
The two e-commerce legends have been "whipped", behind which is the changeable and cruel pattern of e-commerce competition.
For more than 20 years, the Internet can be said to be e-commerce where there is traffic, and there is crazy involution where there is e-commerce.
But in such a cruel and changing battlefield, Vipshop, which has a history of 16 years, seems to be outside the e-commerce, calmly and muffled to make a fortune. Even the more noisy the outside world, the quieter it is, the more turbulent the industry, the more rock-solid it is.
At the beginning of 2023, many peers were busy reducing costs and increasing efficiency200 million yuan to win 5 buildings, planning to rent to employees at a very low ** of 300 yuan a month to solve the problem of employee accommodation, was hotly discussed by netizens "fairy company".
From its establishment in 2008 to today, it has simply become a "paradise" in the e-commerce industry, and it is also the most chewable and unpryable diamond in the industry's involution war.
The Internet industry is good at exchanging losses for growth, and e-commerce is even more terrifying to burn money. In 2016, JD.com, which had been established for 12 years, finally ended its 11-year losing streak and ushered in its first profit; Pinduoduo also suffered a lot of losses, so it "burned" out of the sky.
Vipshop, but soon after its establishment, it relied on super profitability and became a unique e-commerce martial artist.
When it was first established, it was ridiculed by its peers for its simple business model, rustic app pages, and lack of presence, but by the fourth quarter of 2013, the fifth year, its gross profit margin had reached 245%, far exceeding the 176%, JD.com's 98%。
So much so that Greenwich Research Group, an investment research institution, released a short-selling report, exclaiming: "In a very competitive market, the sustainability of profit margins is extremely low, and Vipshop's gross profit margin cannot be explained."
The fact is that after making a profit for the first time in 2012, Vipshop's road to profitability has never been broken. From 2020 to 2022 during the epidemic, its net revenue continued to exceed 100 billion yuan, and its profit reached a record high of 6.3 billion yuan.
On November 14 this year, Vipshop released its financial report for the third quarter of 2023, showing that its net revenue was 22.8 billion yuan, a year-on-year increase of 53%；Non-GAAP net profit was 1.8 billion yuan, a year-on-year increase of 155%, revenue and net profit both increased.
Liu Qiangdong once predicted, "Vertical e-commerce must die, and of course it can be sold." Many vertical e-commerce companies did fall as they said, but when it came to Vipshop, the prophecy failed, and JD.com later became its shareholder.
Over the years, Vipshop has survived and abolished its peers such as Vancl, Jumei, and Mushroom Street, and withstood the pressure of giants such as JD.com and **, and even the pressure of acquisitions.
"Sewers'Pick up gold
In 1990, 19-year-old Shen Ya inherited his father's Aurora Electronic Instrument Factory. He was quite business-minded, and soon expanded to the popular battery business, and sold batteries to Southeast Asia and Africa, with an annual turnover of more than 10 million and an annual profit of more than 1 million.
Eight years later, Shen Ya met another shrewd Wenzhou man and his best partner in business, Hong Xiaobo.
The two hit it off and started the import and export business of mobile phone batteries, chargers and other accessories. Shen Ya is responsible for the coordination of domestic manufacturers and the organization of supply sources, while Hong Xiaobo sells goods in Europe, contacts channel providers and first-class merchants, and earns more than 5 million in just 2 years.
By 2008, as the competition became saturated, Shen Ya felt more and more that it was "too hard" to make money through traditional channels. At that time, entrepreneurs such as Ma Yun, Liu Qiangdong, and Li Guoqing had already played well in the field of Internet e-commerce.
Shen Ya decided to change the track and break into e-commerce.
Hong Xiaobo asked a question:What kind of model should be used to participate in this "land division movement"?
The two late entrants, looking at the e-commerce big ** who seemed to have been done by someone, were very confused for a while, and finally they were friends who knew about e-commerce, which gave them initial inspiration: to copy foreign experience, such as the "luxury discount limited-time sale" model of French luxury sale e-commerce vente-privée.
Hong Xiaobo is no stranger to VPs, and his wife often rushes to buy discounted luxury goods early in the morning. Shen Ya also found the "wife group" around him and investigated them one by one, "If there are discounted luxury goods sold online, are you willing to buy them?" ”
Mrs. Tuan's answer was very uniform, "yes".
The two of them instantly increased their confidence, so they had Vipshop quickly launched in December 2008, and almost completely copied the VP model at the beginning.
However, by March 2009, Vipshop had only about 18 monthly orders, and most of the users were Mrs. groups in the circle of friends. It is equivalent to the two of them spent 30 million start-up funds and used countless contacts to overcome the problem of luxury goods, but finally became a "micro-business".
Shen Ya soon discovered the crux of the "unsuitable": at that time, the unit price of online shoppers was only 80 yuan, and the luxury goods were as high as four or five figures**, which was definitely a "niche among the niche".
How to find a more popular market, Shen Ya is optimistic about one thing: iResearch data shows that in 2008, clothing and other fashion goods became the largest online shopping category, and that year was also a year of clothing inventory explosion.
A month later, Shen Ya made a 180-degree turn, shifting from luxury goods to mass clothing brand sales, and played a banner to help clothing brands clear their tails and inventory.
At the beginning, Vipshop had no negotiation power at all, and Shen Ya had to negotiate with upstream ** merchants one by one, and even paid out of his own pocket with Hong Xiaobo to buy some well-known brands of tail goods for discounted sales.
The good news is that this time, they're betting on the right track, and the traffic and volume have been doubling. In August 2009, Vipshop members exceeded 200,000, and the ** merchants who realized that the traffic here was good began to come to the door.
Gaining a firm foothold, Shen Ya's business talent soon became prominent.
In order to continue to attract brand owners, Vipshop has set four major conditions: first, to help deal with tail goods and out-of-season products; Second, you can do free recommended advertising on the homepage; the third is a limited-time "flash sale" sale; Fourth, it is promised that the account period is short and there is no collateral.
Through these methods, Vipshop will use the way of serving luxury brands to carry out free secondary packaging and marketing for second- and third-tier brands, in addition to increasing their brands** and saving marketing costs, but also making these brands more decent even if they are "special sales".
There is no deposit, which makes Vipshop more attractive than other e-commerce companies that settle the payment in the highest half a year.
In order to run the whole model through, so that merchants and consumers have both face and lining, Vipshop has also launched a unique "always two fast" to push quality and efficiency to a higher level: "always" refers to the direct from the brand to the user, abandoning the traditional links such as the national **, so as to reduce costs and increase profits. The two fast are the "fast sales" of the limited-time sale (flash sale) and the "fast out" of the ** chain.
The former, with a limited time and a limited amount of hunger marketing, forces consumers to make quick decisions, so that sales are short-term and fast, and does not impact the brand's original first-class system; The latter, with a large number of purchases and a large number of returns, accelerates warehousing turnover, reduces inventory risk and financial pressure.
In the end, Vipshop can complete an inventory clearance in 3 days at the earliest, and the sales rate of each brand is as high as 80%, which successfully establishes a winning momentum.
After 2010, the fast-growing Vipshop won the favor of capital and won two rounds of investment of $70 million from DCM in the United States and Sequoia China. In 2011, Vipshop's net revenue soared from $32.6 million to $2$27.1 billion, a figure that quadrupled to 6 in 201292.1 billion US dollars, nearly 30,000 special sales will be launched throughout the year, and the number of cooperative brands will exceed 6,000.
Vipshop, which has only been established for four years, has not only picked up gold in the "sewer", but also become the third e-commerce company listed on the US stock market. When Li Guoqing said enviously, "When a few stupid e-commerce companies are still pinching, Vipshop will come out." ”
Low-key alternative Cantonese pie
In fact, Vipshop has also "soared".
In 2012, Vipshop went public at a valuation of $300 million, which was far lower than expected, but it broke at the opening, and was called a "bloody listing" by the industry. But two years later, it doubled its growth by 37 percent year-on-year in fiscal 2014With a revenue of $700 million, the stock price soared 60 times, and with a market value of more than $10 billion, it became the fourth largest Chinese Internet company.
At the highlight moment, Vipshop confidently asserted that "China's e-commerce has ended the competition for hegemony, the overall situation has been decided, and Vipshop will definitely occupy one of the top three seats." ”
Since then, Shen Ya has built its own logistics and warehousing on a large scale, shouting that "Jingdong and Vipshop must have a battle", and as a result, its troika of "e-commerce, finance, and logistics" quickly drove to the edge of the cliff: revenue growth slowed down, profits decreased, and stock prices were rotten.
Fortunately, in July 2018, Shen Ya learned from the pain, changed his past, and made up his mind: focus on what he is good at and return to the sale. Since then, Vipshop has continued to focus, as if it has put itself outside of e-commerce and focused on the practice of special sales.
Nowadays, Vipshop is even more "Buddhist", and has even been commented by some investors as "no dream, just want to make money".
Starting from Shen Ya and Hong Xiaobo, he was low-key, pragmatic, and focused on his own job and purpose, which also allowed it to finally find its own way of living.
And the former opponent Jumei Youpin Chen Ou seems to be at the opposite end of the spectrum.
Chen Ou is a high-profile entrepreneur who "speaks for himself".The outside world's impression of Shen Ya comes more from rumors, such as the e-commerce person Ma Yun wants to see the most, but it is rare to see him.
Shen Ya believes that "high-profile people die quickly, and low-key people usually live longer", and said that he did business in Guangzhou and was deeply baptized by the "Guangdong faction" pragmatically.
This is very similar to Xu Yangtian, the founder of SHEIN, who also does business in Guangzhou and spans ** and e-commerce:Low-key and pragmatic, focus on the track, and focus on core competence.
However, compared with SHEIN's avant-garde play of various Internet and big data tools, Shen Ya still maintains a traditional business style.
At the beginning of entering the field of e-commerce, his e-commerce reserves were close to zero, and he spent 500,000 yuan to study EMBA at Cheung Kong Graduate School of Business, which made up for all kinds of e-commerce knowledge and broadened his e-commerce network. Vice President of Huaqiangbei once complained about Shen Ya and Hong Xiaobo:
You talk to them about e-commerce and the Internet, and they don't know anything about it. ”
Shen Ya also said frankly, "We are still traditional retailers, and we know more about business than electricity." "Many investors are e-commerce peers, so they have not been optimistic about Vipshop.
But at the same time, he believes, "I don't think that only Internet thinking can do a good job in e-commerce." The essence of e-commerce is to get the business through, you put the front-end first-class business and the downstream customers, these two things are thought through, just do it. ”
To this end, Shen Ya and Vipshop did not hesitate to do a lot of "anti-Internet thinking".
In the e-commerce industry, the trend is to conduct user analysis based on big data, so as to achieve accurate matching, cost reduction and efficiency increase. However, Vipshop has gone the opposite way and set up a team of thousands of offline senior buyers.
In the eyes of some e-commerce bigwigs, this is simply "contrary to the essence of e-commerce". Shen Ya feels that ** is a personalized fashion product, if there is no sophisticated buyer judgment, it will cause the selection of ** and homogenization to be too high and reduce the attractiveness, and then unable to increase gross profit.
Vipshop also took the lead in moving advertising into TV stations, elevator screens, and used traditional roads that don't seem to be on the Internet to expand their brand influence and lock in more and more users.
At one time, Vipshop was the only e-commerce app that didn't have a search bar. Shen Ya believes that if you want to do women's business, you shouldn't let users search and compare prices, and when they don't have a destination to visit the app, emotional consumption is easier to achieve.
Its development logic and methods are more like traditional retailers, more focused on the essence of retail, which may also be the key to Vipshop's independence**, and at the moment when e-commerce must finally accept the essential test, the more courageous it becomes.
For example, although the sale is a three- or four-line sinking business, Shen Ya insists on entering the brand of Vipshop, which must have more than 200 stores or counters, and the online brand must rank in the top 20 in the same category.
More than half of Vipshop's promotions, salary increases, and appraisal criteria are related to user experience. In terms of app page design and third-party advertising, Shen Ya always said that things that affect the user experience "must not be done".
The pursuit of "no discount" in quality and experience has also kept the repurchase rate of Vipshop above 90% all year round, and the user stickiness is extremely high.
Another style of Shen Ya that is not Internet is that he never takes the initiative to tell the scale and story, but runs around the front line of the business and is a manager who does everything in detail.
Before 2010, he had to go to the logistics warehouse every day to check the situation; In a meeting with ** businessmen, Shen Ya even had to communicate the cost of a carton in person.
At the beginning of the business, Shen Ya knew very well that "vertical e-commerce will be harder", and mentioned more than once that under the situation of increasing concentration of e-commerce and increasingly fierce low-price subsidies, Vipshop will also be under great pressure.
Therefore, he insists on "practicing internal skills" in key links such as chain management, user experience, and logistics to ensure the efficiency and high gross profit of Vipshop, and does not deviate from the sale users and their business track.
According to a Vipshop executive, the company's senior management has emphasized in many internal meetings that "Vipshop must stick to the sale and do what it is not good at".
If we say, Internet thinking is the key to whether it is Ali Jingdong, Pinduoduo, or SHEIN, and finally doing large-scale. Shen Ya, who adheres to traditional business and even "anti-Internet thinking", asked Vipshop to guard "one acre and three points of land" and not easily fall out of the table.
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